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Computable general equilibrium simulations of the effects on the U.S. economy of reductions in beef consumption

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Listed:
  • Peter B. Dixon
  • Maureen T. Rimmer
  • Daniel Mason-D'Croz

Abstract

We use USAGE-Food, a modified version of the USAGE model, to simulate the effects on the U.S. economy of reductions in meat consumption brought about by health-related preference changes or induced by taxes. Modifications include: (a) separate identification of Beef processing; (b) estimates of price elasticities of demand for beef and other food products derived from a survey of econometric studies; (c) nesting in the household utility function and in the production functions of food-serving industries to represent substitution between flesh and non-flesh food; and (d) allowance for flows of agricultural land between agricultural activities. At the macro level, the main influences on our results are health-related effects on medical expenditures and labour supply. The pure food-chain effects have negligible macroeconomic consequences. Other conclusions are: 1: using beef-tax revenue to subsidize healthy foods strongly accentuates substitution away from beef towards healthy foods. However, the subsidy leads to an overall increase in the consumption of food. 2: using beef-tax revenue to expand public consumption has a negative effect on private consumption. In terms of aggregate demand, the two effects are broadly offsetting.

Suggested Citation

  • Peter B. Dixon & Maureen T. Rimmer & Daniel Mason-D'Croz, 2020. "Computable general equilibrium simulations of the effects on the U.S. economy of reductions in beef consumption," Centre of Policy Studies/IMPACT Centre Working Papers g-311, Victoria University, Centre of Policy Studies/IMPACT Centre.
    • Handle: RePEc:cop:wpaper:g-311
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    References listed on IDEAS

    as
    1. Burfisher,Mary E., 2017. "Introduction to Computable General Equilibrium Models," Cambridge Books, Cambridge University Press, number 9781107584686, June.
    2. Peter B. Dixon & Maureen T. Rimmer & Robert G. Waschik, 2017. "Updating USAGE: Baseline and Illustrative Application," Centre of Policy Studies/IMPACT Centre Working Papers g-269, Victoria University, Centre of Policy Studies/IMPACT Centre.
    3. Dixon, Peter B. & Rimmer, Maureen T., 2013. "Validation in Computable General Equilibrium Modeling," Handbook of Computable General Equilibrium Modeling, in: Peter B. Dixon & Dale Jorgenson (ed.), Handbook of Computable General Equilibrium Modeling, edition 1, volume 1, chapter 0, pages 1271-1330, Elsevier.
    4. Burfisher,Mary E., 2011. "Introduction to Computable General Equilibrium Models," Cambridge Books, Cambridge University Press, number 9780521139779, December.
    5. Burfisher,Mary E., 2011. "Introduction to Computable General Equilibrium Models," Cambridge Books, Cambridge University Press, number 9780521766968, December.
    6. Burfisher,Mary E., 2017. "Introduction to Computable General Equilibrium Models," Cambridge Books, Cambridge University Press, number 9781107132207, June.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Peter B. Dixon & Maureen T. Rimmer, 2021. "Who will pay for improved health standards in U.S. meat-processing plants? Simulation results from the USAGE model," Centre of Policy Studies/IMPACT Centre Working Papers g-314, Victoria University, Centre of Policy Studies/IMPACT Centre.

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    More about this item

    Keywords

    Reducing U S beef consumption; CGE simulations; effects via health expenditures; effects via labour supply;
    All these keywords.

    JEL classification:

    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • I19 - Health, Education, and Welfare - - Health - - - Other
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy

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